Dynegy Inc. has started its effort to unload its communications assets by selling off its European broadband network to an affiliate of London-based Klesch & Company for an undisclosed sum. Klesch is a private equity firm specializing in European restructurings.

Dynegy said it expects to report a slight gain in the first quarter related to the sale. Its European communications operations consist of a high-capacity broadband network with access points in 32 cities throughout Western Europe. Dynegy bought the assets when it purchased iaxis Ltd. in early 2001. The sale marks its exit from the European communications market.

“This is a strong first step in Dynegy’s strategic commitment to divest its investment in communications and focus on our core energy businesses,” said CEO Bruce Williamson. “The final phase of this commitment is the exit from the U.S. portion of our communications business. We expect full resolution on this issue in early 2003.”

Klesch & Company Chairman A. Gary Klesch said he thinks the European telecommunications arena may be bottoming out and the Dynegy assets have potential going forward.

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